Silicon Valley’s Bet on the Future and War on the Present

From Bloomberg (Andreessen and Butterfield), by Michael Kovac (Williams), all from Getty Images.

Following the private tech markets has, of late, produced the sort of daily stimulation commensurate with a roiling presidential campaign, late-summer pennant chase, or, perhaps, an Adderall dependency. The tech industry may have once been a boring eco-system populated by scrawny nerds in ill-fitting clothes and ratty New Balances, but its founders are now truly the movie stars of our time. For generations, Hollywood lured good-looking kids from the farm belt and turned them into well-compensated, under-dressed overnight idols. Now its seemingly more likely that the tech industry will lure (admittedly less hunky) young guys from Wisconsin (Marc Andreessen), or Nebraska (Evan Williams), or even rural Canada (Stewart Butterfield) with its promise of crop-to-cup coffee, office ping pong, the chance to meet Kara Swisher, and the opportunity to start a zillion-dollar company. A smattering of Web sites now covers the start-up industry’s every vicissitude with the eagerness of a supermarket tabloid. It's a self-reinforcing cycle, all supported by venture capital. As Sam Altman, the co-founder of Y Combinator, said yesterday, “The most important thing we do . . . is pick great founders.”

We already know that movie stars aren’t like the rest of us. They look better and are immune to body hair, among other things. But Silicon Valley founders bare even less resemblance. It’s not that they are simply smarter or dropped out of Stanford—though both attributes tend to be true—so much as that they have convinced each other that they are inhabiting an altogether different world. Ours is a world of the present; it's one in which the stock market effects our 401(k), jobs are hard to hold down, and a small disruption in the economy can have seismic personal impact. Theirs is decidedly one of the future.

Generally, this is O.K. Someone needs to be investing in the mechanisms of the future. As Andreessen recently noted on Swisher’s Re/code Decode podcast, venture capital now often fills the void created by large corporations, many of whom are so whipped by their shareholders that they slavishly return capital rather than invest it in their own moonshot projects. The thriving (and frothy) V.C. market is proof of the lucrative niche that this psychological edge affords. It explains, in part, why Marriott never thought up Airbnb, or Hertz didn't come up with Uber, or how Blockbuster never saw Netflix coming. (I mean, it really never saw it coming. Fifteen years ago, the chain passed on the chance to buy Netflix for $50 million. Now it’s worth more than $50 billion.)

But there are problems with focusing exclusively on the future. Elizabeth Holmes, the founder of Theranos, a start-up darling once valued at $9 billion, was recently accused of falsifying the accuracy of her technology. Last week, BuzzFeed's Will Alden broke the news that the beleaguered unicorn H.R. company Zenefits reportedly repeatedly broke licensing laws. Both of these companies were simply following the Valley’s edict to move fast and break things. In the future, after all, once they achieved satisfying market share, and their technologies were honed, the ends might justify the means.

The whole premise of venture capital, indeed, and the world of tech start-ups, is premised on the future. Despite the fact that there are now more than 140 start-ups valued at $1 billion or more, V.C.s don't even blink when explaining sanguinely that the vast majority will fail. Recent write-downs, including Fidelity's devaluation of Snapchat, suggest that no one is immune. Meanwhile, the true companies of the future will more than justify the financial attrition. One Uber can make up for a whole lot of dead unicorns.

While speaking to Bloomberg's Emily Chang, Altman generally dismissed the growing fear about the valuations for private technology companies. They would continue to go up and down, he said, until the market eventually got them right. What was hard to miss, however, was, well, Altman's cherubic face. Like many of today's most visible figures in Silicon Valley, he is young (he's 30), and attended Stanford, where he was studying when the last tech bubble went pop. He is, in fact, the very avatar of the future.

In some ways, Altman is right. The market will eventually have its way with this generation of tech start-ups. Some will pop, others will die. The problem with focusing on the future, however, is that it negates the profound effects of the present. If the vast majority of unicorns do eventually combust or face some sort of reckoning, thousands of people will lose their jobs; regular people, who invest in the mutual funds that fund the unicorns, will feel the effect. The future might be an extraordinary place for those in Silicon Valley, but the present will become that much harder to traverse for everyone else.